Recently, the Haryana government announced a reduction in the circle rate for Gurgaon which has come out as a good news for the real estate industry. It is expected to boost demand for residential property after the prolonged sluggishness in Gurgaon. In the backdrop of a reduction in property prices over the last few months, the government decided to reduce the circle rate by a substantial 15 percent.
Circle rate is a major factor in deciding the pricing of an area’s real estate. Circle rates and property prices go hand-in-hand. It is the rate that determines the amount of stamp duty one has to pay to the government when he purchases a property. Circle rate differs from city to city and may also differ for different areas in the same city. In some locations, circle rates are also known by other names like in Mumbai, it is known as the ‘Ready Reckoner Rate’. In a nutshell, it can be defined as the minimum rate at which a particular property, whether residential or commercial, can be sold or transferred.
These rates act as major catalysts in defining the price of properties in a particular location. When buying a property, one has to take care of several other expenses besides the property’s selling price such as the stamp duty, registration charges and property taxes. So if the circle rates will be high, a higher stamp duty has to be paid by the buyer, which adds to his overall financial burden. This rate cut has made a property purchase less burdensome for the homebuyers of Gurgaon.
As reported by the Economic Times, Gurgaon Deputy Commissioner T L Satyaprakash said that the circle rates have been decided after a thorough examination of the current market rates and the prices of plots set by the private realty development firms.
This rate cut in Gurgaon was very necessary. The sluggish market was forcing developers to reduce the prices of their units in order to push sales. A reduced circle rate bring new hope among the buyers as buying a property or investing would be less burdensome. It is the first time that the Gurgaon authorities have decided upon a rate cut as high as 15 percent.
This reduction in circle rates will bring revival in Gurgaon real estate market by making properties affordable.
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